In a recent edition of The Gage, Greengage’s podcast channel, Rosalyn Breedy, a Corporate, Funds and Financial lawyer with over 25 years’ experience working in private practice, investment banking and family offices, talked to Greengage’s CEO Sean Kiernan about entrepreneurship and diversity in the UK.
As a starting point, Rosalyn referenced recent academic research which demonstrates that while the UK has a strong entrepreneurial culture, and an appetite for risk-taking with respect to getting new projects off the ground, we fall somewhat short when it comes to seeing entrepreneurial projects through to a successful outcome. It has always been a challenge in the UK; there are lots of entrepreneurial activity, but for many smaller businesses it can be more of a ‘Death Valley’ when it comes to successful navigation along the scaling pathway.
“We need to be better at ensuring that businesses that receive backing in the early, speculative, ‘blue sky’ stages continue to be supported as they move along their business journey, a perhaps more effective alternative to the more typical ‘spray and pray’ approach” — Rosalyn Breedy
As well as being a ‘nation of shopkeepers’, the UK is also, according to research, a ‘nation of pragmatists’ in the sense that while we’re good at ‘getting things done’, and fixing problems, we are not so advanced in concepts of business innovation, or taking a more strategic approach regarding “What core processes do we need to put in place in order for this business proposition to work”?
Other barriers to success for entrepreneurs relate to access to finance, trust, and workforce availability and mobility. London, for example, gathers a significant proportion of entrepreneurial talent from other parts of the UK, making it more of a challenge for regional entrepreneurs to themselves launch and grow successful business ventures.
One potential solution to this particular challenge is to leverage the UK’s family-owned businesses to support a more regional approach with respect to UK’s entrepreneurs. Similar to Germany’s Mittelstand of companies operating in the industrial space (see Greengage’s white paper on the UK Mittelstand), family-owned businesses and SMEs (small and medium-sized enterprises) in the UK are significant contributors to the economy, responsible for employing a staggering proportion –51.4 % — of the UK’s working population. This segment, which is importantly not London-centric, provides regional stability and cohesion and ‘on the ground’ experience of launching and growing successful businesses.
Established family businesses can also help entrepreneurs instil the concept of trust, essential in the creation of a robust entrepreneurial culture. It is very difficult as an unknown quantity to get funding for new concepts and opportunities; partnerships or mentoring with successful family businesses can be a way to de-risk unknown quantities for investors. For example, one way to encourage a more entrepreneurial culture could be for family-owned entities to themself provide — or underwrite — seed capital for new ventures. They are already ‘known and trusted’ entities, with demonstrable track records of business success. As such, they are very well-placed to be a valuable partner and supporter of a more entrepreneurial business culture in the UK.
“In an ideal world, if these businesses were to team up with the UK’s world class universities and other ‘engineers of innovation’ like Innovate UK, we could create a robust architecture to better support UK entrepreneurs” — Rosalyn Breedy
Innovate UK’s Catapult Network and strategy has led to regional — and specialist — centres of excellence, including in Bristol (Higher Value Manufacturing) and Manchester (Retail). This cluster approach means high local visibility, supports entrepreneurism and innovation and perhaps most importantly, attracts research funding and draws in talent.
In summary, there are several key factors that are essential in nurturing UK’s entrepreneurs. The key building block factors of 1) Exposure, 2) Education, 3) Networking and relationship building, and 4) Communication will be outlined in more detail in the second blog in this series.
The pieces of the puzzle are there, it is a question of fitting them all together.
To learn more, listen to our podcast series, The Gage Episode 7 — The Importance of Family Business and Entrepreneurship in the UK